Canada expected to follow neighbour to the south in economic slowdown
Economists warn that as the U.S. economy slows down, Canadian businesses and investors should prepare for an inevitable spillover. Though Canada is expected to outperform the U.S. in most areas, a slowdown in manufacturing and consumer spending is expected, and an upsurge in unemployment is a possibility, too. Canada’s housing boom has also rapidly cooled, and consumers should brace for interest rates to return to more normal levels. David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., argues, “There isn’t even a debate: the Canadian economy is moderating. We’re going to move in the same general direction [as the United States].” Canadians have been spending at an unsustainable rate—faster than their incomes are rising—which will also contribute to this slow-down. But fear not: a Bank of Montreal economist said all this doom and gloom does not mean Canada will experience a double-dip recession.